Warner Bros. Discovery is reportedly preparing to shut the door on Paramount’s hostile takeover attempt, even after the bid gained fresh backing from Oracle co-founder Larry Ellison. The all-cash offer values Warner Bros. at around $108 billion ($30 per share) and was revised to address earlier concerns over financing and execution risk. Last week, Paramount added Ellison’s personal equity backing (estimated at more than $40 billion) and increased the penalties it would pay if the deal fails to close, in an effort to reassure both the board and shareholders.
However, despite those changes, Warner’s leadership is said to remain unconvinced, according to a recent report from CNBC. The board continues to view the proposal as carrying too much uncertainty, especially when compared with Warner’s existing agreement with Netflix, which is seen as more straightforward and easier to execute. Even though Paramount is offering more money on paper, Warner has already agreed to a deal with Netflix that values the company at about $82.7 billion using a combination of cash and stock. That agreement has financing secured and comes with fewer conditions, which Warner executives believe makes it much more likely to go through without problems.
In the meantime, Paramount has argued that its proposal delivers immediate value to shareholders by offering cash rather than stock, while also creating a media giant with unmatched scale. A combined Paramount-Warner entity would bring together major film studios, premium television networks, and streaming platforms under one roof, potentially rivaling or exceeding competitors like Disney in size. Paramount has also suggested that the deal would face limited regulatory resistance compared with other large media mergers.
Even so, Warner’s board appears focused on the practical challenges of pulling off such a massive acquisition. Integrating two complex media businesses would require substantial capital, careful restructuring, and the assumption of significant debt, all at a time when the entertainment industry is under pressure from declining linear TV revenues and intense competition in streaming.
Just days ago, WBD’s board formally warned investors about Paramount’s proposal, highlighting several major concerns around risk and execution. In response, Larry Ellison stepped in to back Paramount’s bid with additional financial support, but shareholders remain split. Some investors see the higher offer and stronger financing guarantees as a positive move, while others are not convinced the revised terms make up for the extra risk.
It is also important to note that the Netflix deal includes strict breakup fees. If the Netflix acquisition fails to win regulatory approval, Netflix would have to pay $5.8 billion to Warner Bros. Discovery. On the other hand, if Warner cancels the agreement to chase a different offer, it would owe Netflix a $2.8 billion termination fee.
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